Cézanne said of Monet that he was "just an eye, but what an eye". I say of director Larry Clark: he's just a pervy old voyeur - but what a pervy old voyeur! Beyond exploitative, beyond provocative, beyond porn chic, Larry Clark's new movie is unmissably powerful and disturbing: a fictionalised true-crime drama about a bunch of Florida teenagers who murder a sadistic bully.

From the very first frames we are unmistakably in Clark territory: the territory he mapped out with the 1995 film Kids, his notoriously explicit depiction of prepubescent sex. His cast here are basically the Kids From Infamy, three or four years on. They are 17, 18, 19 years old: rich, aimless, white boys and girls who have flunked out of high school with nothing to do all day but hang at the mall or at the beach or outside each other's houses. They drive around in expensive European convertibles paid for by their unsmiling parents, take calls on their cellphones and exchange banal dialogue in voices strained and distorted by great lungfuls of weed.

And of course have sex. No director could possibly be more uncompromising, and more utterly unapologetic, about his rapture at teenagers' naked bodies. It's the kind of rapture that leaves the concept of "prurience" light years behind. His camera lingers with reverent artistry on the breasts of teenage girls as they mount their straining yet semi-conscious boyfriends, or the boys' tight pecs and abs as they dance on stage at a gay bar, prior to offering phone sex to the creepy clientele.

Clark's roving eye is always savouring a gratuitous crotch shot, checking out a cleavage shot. (Is there is a need for it? Reason not the need!) His modus operandi is a continuous, humid awe for youthful beauty, wherever he finds it - bathed in a cool, blank, affectless sheen like a Dazed and Confused magazine cover.

It is violence that colours this hyper-awareness of sex, violence that asserts itself from the very start and makes the sex look like a fashion shoot in hell. The bully and his chief victim are Bobby and Marty: pretty boys played by Nick Stahl and Brad Renfro. Chillingly, Bobby has been terrorising Marty since they were small children, tormenting him, humiliating him, assaulting him - while maintaining the psychotic fiction that he's his best friend. We join the story as Bobby is pimping Marty to gay men for phone sex, twisting his ear and punching him in the face if he hesitates or displeases in any way.

Their master-servant relationship comes to a crisis when Marty falls in love with beautiful, dark-haired Lisa, superbly played by Rachel Miner, who becomes obsessively outraged at Bobby and the way Marty is dissed and beaten up. So she rallies all the slackers and stoners of her acquaintance to help her in having Bobby killed, and her conspirators gigglingly agree, their capacity for understanding the real world substantially eroded by Eminem videos and playing Mortal Kombat on acid.

Renfro and Stahl are familiar faces from pictures that aren't a million miles from this one - Renfro from Terry Zwigoff's Ghost World and Stahl from Todd Field's In the Bedroom. But neither director got from them anything like the intensity they show in Clark's movie: nothing like the repressed fear, the slow-burning envy and rage, the horrific black comic yearning in Bobby's malign rat-like features or poor Marty's lumpen resentful face. Marty will be doing Lisa in one room, and Bobby, like some priapic satan, will burst in, hit Lisa with a leather belt until she gets off and then screw Marty himself. In another scene, Lisa's friend Ali (Bijou Phillips) is lured by Bobby into his bedroom at a party and then assaulted while made to watch his squalid gay porn videos. Numb with shock, she comes out fully clothed and stammers to her grinning, uncomprehending friend: "I just got raped ."

There is something truly hellish in these scenes - for which you do need to steel yourself. Clark's obsession with his adolescent stars and their bodies may be unwholesome. But there is an extraordinary, unanswerable power, a full-beam force in his response to their turbulent lives. The disturbing anti-glamour he confers on them is an unmistakable signature, and his remorseless cranking up of the anxiety levels until the final, unwatchable murder sequence is superbly handled.

The result is a magnificent, coldly brilliant movie conveyed to us in an amoral neon glare, in which the director's only compelling value judgment is a swooning reverie at the beauty of his teen stars. In this Lord of the Flies world, adult supervision is not so much absent as irrelevant. Parents are indifferent or ineffective, and teenagers see no reason not to avail themselves of the adult prerogative of violence.

The sole grown-up presence among them is Clark himself, who combines a rigorously detached aesthetic sense with a weird, implied empathy for all his characters: the good, the bad, the bullies and the bullied. They are his kids, and he is down with them. It's a disconcerting combination, but a stunning piece of work - In Cold Blood for the new decade.